Volkswagen Strategic Position Essay Example | Topics and Well Written Essays - 4500 words

Volkswagen Strategic Position - Essay Example Volkswagen entered with a share of ownership of 50% for production and sell of cars in the markets of Greater China. Subsequently in 1991, Volkswagen expanded its operations with a second joint venture in the name of FAW-Volkswagen Automotive Company Ltd. The markets of Greater china are one of the major markets of the German automobile group. By 2004, the German automaker group has laid its strong foundation to forms its subsidiary by the name of Volkswagen Group China. The company is governed by a six member committee of senior management. The senior management is responsible for corporate governance and supervision of the group in Greater China. The members of the governing body are accountable for several divisions of the operations and management that include sales and marketing, finance, operations, personnel and government relations, technology, etc. By focusing on these key areas and strengthening its strategic position in Greater China, the Volkswagen Group China today has s ixteen offices that are spread across the country that caters to the automobile markets. Volkswagen over the years has not generated huge scales of revenue from the sell of cars in the markets of Greater China but is also a key contributor to the rapid pace of growth of the economy of China. The members of the governing body in Greater China are not only responsible for the supervision of its operations but also look at the opportunities for new investments for expansion of the markets of the group. Volkswagen group in China has expanded its volume of production of cars over the years with the optimal use of resources of production. The volume of sales of Volkswagen Group China has reached around 2.81... This essay stresses that since the entry of VW in China it has become the largest Automobile Company in the country. One of the biggest reasons of success of VW has been the choice of market entry strategy which happened to be JV. This helped the company to reduce the environmental risks and set up effective distribution network in the country. As a result China has become the second largest market for VW after VW. Volkswagen has very few weaknesses. Some of them have been discussed in this section. Has relatively low amount of new technology and skills over the competitors. The management of the company is also quite old. One of the major opportunities has been the entry of China into WTO which has opened up the economy inviting a lot more investment opportunities. Another major opportunity has been the growth of the Chinese automobile market. This paper makes a conclusion that the company should focus on augmentation through augmented services such as make to order sales programs to gain customers trust and market share. Volkswagen and the JV partners may have to invest a lot more to boost up the out capacity and to increase sales in China. In future Volkswagen may have to use china as the base or hub to explore the Asian market. Already Volkswagen has made it clear about plans to export cars made in China to different Asian countries. This may help the company to lower the cost and improve quality.